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08/12/2021

Court approves mall owner’s reorganization plan

Al Urbanski
Real Estate Editor & Manager
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The new-age anchor at CBL's Westmoreland Mall outside of Pittsburgh.

“This confirmation is a huge milestone for CBL,” said the company’s CEO Stephen Lebovitz in a mood of deliverance after having undergone a Chapter 11 filing and a financial restructuring during the pandemic.

On Wednesday the United States Bankruptcy Court for the Southern District of Texas entered an order approving CBL Properties’ reorganization plan, which received 95% yes votes from creditors.

Nearly a year ago, Lebovitz commented that the reorganization would give CBL a stronger balance sheet and extended debt maturities to continue with property renovations like the addition of a casino at Westmoreland Mall outside of Pittsburgh. “CBL will have more flexibility to execute on our major strategy of transforming our properties from traditional enclosed malls to suburban town centers that offer a wide range of uses,” Lebovitz said at the time.

The approval arrives during an upswing in traffic at enclosed malls. Just this week the foot traffic analysis company Placer.ai reported that mall visits—29% below 2019 numbers in February—came even with 2019 numbers this July.

The plan calls for restructuring the Company’s balance sheet to provide for the elimination of more than $1.6 billion of debt. Consenting Noteholders will receive $95 million in cash and $555 million of new senior secured notes. Certain noteholders will provide up to $50 million of new money in exchange for additional convertible secured notes. The remaining bank lenders holding $983 million in principal amount under the secured credit facility will receive $100 million in cash and a new $883.7 million secured term loan.

Existing common and preferred stakeholders are expected to receive up to 11% of common equity in the newly reorganized company.

“After months of hard work and collaborative negotiation, we are thrilled to receive such unprecedented support of our plan from every creditor group, as well as preferred and common equity,” Lebovitz said. “This plan provides a favorable recovery to every constituency and a strong path forward for our company and our business.